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Bitcoin's $137k Jackpot

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Re: Bitcoin's $137k Jackpot

#21

Post by xigency »

Sort of unrelated but,

"According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day."

http://motherboard.vice.com/read/bitcoin-is-unsustainable

I find this interesting thinking about Bitcoin as a currency. The first cryptographic currency example that I had read, from a cryptography book, didn't involve active power. I'm really surprised that Bitcoin has been able to gain this much popularity with its design. Does this explain how you might be able to lose a household-sized amount of money in a transaction on this network? I don't know, but I think that the blockchain idea might not be the ideal for digital currencies.

Re: Bitcoin's $137k Jackpot

#22

Post by thevibesman »

andirk wrote: post #10
thevibesman wrote: post #5

Thanks for the post, I enjoyed the read (haven't read much about bitcoin laundering). One small nitpick: > My payment is going to be with newly mined coins, the Bitcoin equivalent of fresh, crisp dollar bills straight from the Mint. Coins are minted, bills are printed, so only coins come from the U.S. Mint. Paper bank notes and stamps come straight from the Bureau of Engraving and Printing (way less fun to say though…

Also, you wouldn't want money coming straight from the Bureau because I'm sure the serial numbers would be so incredibly easy to track. For example, your bills have sequential serial numbers, or are clearly from the same batch. Better to have them straight from the Panama Papers.

> Better to have them straight from the Panama Papers.

Haha, great point!

Re: Bitcoin's $137k Jackpot

#23

Post by vilhelm_s »

Bedon292 wrote: post #7

Obviously I am missing something on this. How do you direct the transaction fee to a specific miner? I thought it just went out there for anyone to process. If you can, why don't people just direct all their transaction fees at their own mining operation or a friend they trust?

Ordinarily transactions are broadcasted to the entire network for anyone to process. The miner who first finds a solution will get the fee for that transaction.

I think the idea here is that you instead privately give the transaction to only your favoured miner. He will then try to hash it, and if and when he finishes it, he will broadcast the transaction and the solution to the network at the same time.

Ordinarily there would be no advantage to give your transactions privately to just one miner; if you broadcast it publicly there will be many more miners working on it, so it will commit faster. So unless you are deliberately trying to overpay (like here) it would be a waste of money.

Re: Bitcoin's $137k Jackpot

#24

Post by ChuckMcM »

"exogeneous enforcement mechanisms." -- Chortle, I really need one of those :-). I had not been aware of how the miners could launder bitcoin, that seems like a pretty big hole you can drive a lot of bitcoin through.

Re: Bitcoin's $137k Jackpot

#25

Post by theandrewbailey »

> Remember that time when you tried to transfer your life savings from one bank account to another for a small fee, but swapped the fee field with the total transfer amount field, and ended up losing all your life savings? Of course you don't.

Of course I don't. I know banks can have terrible design, but I've never seen a 'fee' field on any transfer form. (maybe because I use credit unions?) That bank might as well tell everyone 'please let us eat even more of your money on top of the bogus fees we already charge you'. And don't real banks have regulations preventing mess ups like these?

Re: Bitcoin's $137k Jackpot

#26

Post by cjbprime »

taesu wrote: post #3

I'd definitely keep that amount if I won it through mining. It's really hard swapping `amount` to `fee`, in coding, so I bet that this was a human mistake on sending btc, not coding mistake...

I heard that the web interface on the exchange they used has fee and amount fields next to each other and with identical widgets (but different labels), so it's extremely easy to see how a human would make that mistake there.

Re: Bitcoin's $137k Jackpot

#27

Post by joering2 »

Cyph0n wrote: post #9
hughes wrote: post #2

This reminds me of a similar error from 2005[1] where a trader mistook the "price" and "quantity" fields of the trading software. Instead of selling 1 share for 610,000 yen, 610,000 shares were sold for 1 yen. The mistake cost around $225 million. [1] http://www.foxnews.com/story/2005/12/09/typing-error-causes-...

Damn that's huge. You'd assume that the software checks the dollar amount and asks for a confirmation, or better yet permission from a higher up, if it exceeds some value.

it does ask for confirmation. As OP wrote - it was an error, NOT a mistake.

Re: Bitcoin's $137k Jackpot

#28

Post by shemnon42 »

xigency wrote: post #21

Sort of unrelated but, "According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day." http://motherboard.vice.com/read/bitcoin-is-unsustainable I find this interesting thinking about Bitcoin as a currency. The first cryptographic currency example that I had read, from a cryptography book, didn't involve active power. I'm really surprised that B…

Those older examples suffered from the "double spend problem" where you could spend the digital currency twice (or more). Kind of like cheque fraud.

The Proof of Work part of bitcoin (the part that consumes all that electricity) creates a consensus record so that if double spends are performed, only one of them will stick. Now double spends are a "feature" called "replace by fee."

Preventing double spends is worth millions to investors, so that's why it continues.

Re: Bitcoin's $137k Jackpot

#29

Post by thescriptkiddie »

xigency wrote: post #21

Sort of unrelated but, "According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day." http://motherboard.vice.com/read/bitcoin-is-unsustainable I find this interesting thinking about Bitcoin as a currency. The first cryptographic currency example that I had read, from a cryptography book, didn't involve active power. I'm really surprised that B…

Each bitcoin block takes 25 BTC (11000 USD at time of writing) worth of electricity to mine, because that is the maximum that the sum total of miners can afford to spend and still break even. Currently it's only possible to fit somewhere around 2000 transactions in each block, because there is a hard-coded limit on the size of a block (1 MiB). So each transaction costs 11000/2000=5.5 USD, which is indeed the approximate value of 1.57 days worth of average per household energy consumption in the US. This is a big reason why it is important that the 1 MiB limit is lifted soon, the artificial restriction on transaction volume pushes the cost per transaction far too high. As a side note, when the block reward halves to 12.5 BTC in a few months, we will either see the value of bitcoin double or the hashrate (and energy consumption) halve - probably a little of both.

Re: Bitcoin's $137k Jackpot

#30

Post by vonklaus »

Is MML(miner money laundering) a viable concept? I thought that the transaction blocks were randomly distributed so it would be hard for a launderer to "target" a miner they trust. If someone has a bit more technical insight about whether this makes sense, or is viable I would be interested.

I would also contend that even if it was trivially easy to do, it would probably make more sense to just route transactions to various wallets and then to some exchanges and into other currencies, ect. I don't know if the miner thing makes sense

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